1428.HK WACC - Weighted Average Cost of Capital

The WACC of Bright Smart Securities & Commodities Group Ltd (1428.HK) is 6.6%.

The Cost of Equity of Bright Smart Securities & Commodities Group Ltd (1428.HK) is 6.90%.

The Cost of Debt of Bright Smart Securities & Commodities Group Ltd (1428.HK) is 6.20%.

	Range	Selected
Cost of equity	5.80% - 8.00%	6.90%
Tax rate	10.70% - 12.10%	11.40%
Cost of debt	4.30% - 8.10%	6.20%
WACC	5.4% - 7.8%	6.6%

WACC

1428.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.5	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.00%

Tax rate	10.70%	12.10%
Debt/Equity ratio	0.29	0.29
Cost of debt	4.30%	8.10%

After-tax WACC	5.4%	7.8%


Selected WACC	6.6%

1428.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 1428.HK:

cost_of_equity (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.